Treasury Secretary Jack Lew, discusses how cyber intrusions are impacting and interrupting businesses and the U.S. financial systems.

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Jack Lew

Jack Lew: Challenges of cybersecurity

Transcript:

without a doubt, the internethas revolutionized the way weconduct our lives and the way wedo business.from making a bank deposit,buying a book and providing amedical diagnosis to restockingthe shelf of a grocery store,filing tacks, and trading stock.but this transformation, whichhas spun incredible waves ofinnovation and entrepreneurshipspun new waves.we have to fortify against thesedangers.it will be a central test goingforward how well we do that.everyone in this room knowscyber intrusions are not somehypothetical event on thehorizon.they were real.and they’re happening everysingle day.these incidents represent adirect threat to our economicand national security,perpetrated by state andnon-state actors around theworld with growing intensity andincreasing sophistication.and while many are just gearingup their defense, some banks arealready spending as much as $250million a year to strengthentheir cyber security.the consequences of cyberincidents are serious.when credit card data is stolen,it disturbs lives and damagesconsumer confidence.when trade secrets are robbed,it undercuts america’sbusinesses and underpines u.s.competitiveness.and successful attacks on ourfinancial system wouldcompromise market confidence,jeopardize the integrity of dataand pose a threat to financialstability.cyber intrusion is far reachingconsequences, recently, cybercriminals stole credit cardsfrom retailers like target,neiman marcus and michaelsaffected more than 100 millioncustomer accounts.hackerings accessed a.p.’stwitter account and announce asfalse alert saying there hadbeen an attack on the whitehouse, which drove down the dowdown three minutes temporarilyerasing roughly $130 billion ofvalue from u.s. stockmarkets.since 2011, we have seen morethan 250 distributed denial ofservice attacks against u.s.banks and credit unionsoverwhelming systems, andforcing some websites to gooffline.the united nations governmentassesses these denial of serviceattacks represent asophisticated threat, almostcertainly intended to disruptthe u.s. financial system.it does not take much to imaginethe impact of those attacks onu.s. banks, if they havepenetrated core operationalfunctions rather thantemporarily disrupting websitesand examiner log-in pages.cyber attacks on our financialsystem represent a real threatto our economic and nationalsecurity.but a ma less cyber actor cancause psychological damage toour financial system withoutwage attacking a bank.risks to the system can be foundat the vendors, suppliers andcontractors who keep ourfinancial system running.they can be found in industriesthat underpin the marks liketelecommunications and energyand they can be found across thephysical infrastructure thatsupports the economy like ourentertainment system and watersupply.these related companies,industries and utilities rely ona network of computer systemsand an incursion at a strategicpoint along the network couldlead to market disruption andmassive harm.from our experience withaccidental failures, we know thestakes are high.for instance, the largest powerdisruption in person historyoccurred in 2003 after acomputer system malfunctioned inthe control room of an ohiobased electric utility company.50 million people were plungedinto dark ness as cascadingpower overloads caused the shutdown to spread from toledo,loichlt to new york city.the outage contributed to thedeath of 11 people.it shut down trading andexchanges and it cost workersand investors more than $4billion in wages and income.while this blackout was not theresult of a cyber attack.it demonstrates our exposure andthe importance of strengthencomputer defenses.

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